On Wednesday 6 March in Paris, the French Minister of Finance, Bruno Le Maire, unveiled the outline of legislative proposals that will, from 2019, tax large digital companies operating in France; this is as a result of a lack of unanimous agreement on taxation at European level (see EUROPE 12152) and until an international solution is found.
This tax will be “simple, targeted and effective”, promised Mr Le Maire.
From 2019, companies whose turnover exceeds €750 million worldwide and €25 million in France will be taxed at 3% of their digital turnover in France.
“This is not the local bakery!”, said the Minister. He also made the following clarification: a platform like Amazon will only be taxed for a transaction involving an Internet user and a product that is not an own-brand product.
The taxation will cover three types of activities: - targeted online advertising; - the sale of data for advertising purposes, “in order to avoid circumvention of the first activity”, explained Mr Le Maire; - the linking of Internet users by platforms.
The companies in question will be able to deduct the amounts levied in respect of the digital tax from their corporate tax base, said Mr. Le Maire.
Based on the observed growth of the digital economy over the past five years, the French authorities expect to generate revenues of €400 million in 2019, €450 million in 2020, €550 million in 2021 and €650 million in 2022.
Bringing the fight to European and international level
The Minister also believes that France's fight for a 21st century tax system that has been adapted to meet digital challenges, was continuing at the level of the European Union, the OECD, (see EUROPE 12204) and the G7, whose country is holding the presidency this year (see EUROPE 12176).
"Today, 23 out of the 27 states in Europe support European taxation. This is not the unanimity required”, admitted Mr Le Maire, for whom "there will be no agreement at the next Ecofin Council on 12 March". However, "Ireland, Sweden, Denmark, Finland must not prevent other countries from moving forward", said the minister, who will propose a “common position" to be defended to the OECD in order that an agreement can be reached in this forum by the end of 2019. (Original version in French by Mathieu Bion)